In support of its application for a £60 million loan, Presage plc submitted its Statement of financial position and Statements of cash flows for the preceding five years. The financier has called also for:

(i) The Statement of income for the same period;

(ii) The break-up value of the company’s freehold premises and machinery;

(iii) The corporate plan, the management budgets and cash flow forecasts for the next year. The managing director of Presage is reluctant to provide this information, being of the opinion that:

(i) The Statement of income should be of no concern to a financier because the loan together with interest is payable irrespective of the company’s performance;

(ii) Break-up values are irrelevant because the company is expected to remain in operational existence for a long time;

(iii) Corporate plans, management budgets and cash flow forecasts contain sensitive information, are prepared only for internal use and should not be disclosed.

Required:

Advise the managing director.